The FCC is holding a mock auction today and tomorrow to prepare bidders for the start of its forward spectrum auction on Tuesday.
In a Wednesday blog post, the FCC said the mock auction is the last opportunity for bidders to get hands-on experience with the bidding system before the auction begins in earnest next week.
According to the FCC, the forward auction will be based on a spectrum clearing target of 126 MHz, which means 100 MHz or 10 paired generic license blocks of spectrum will be offered in most of the markets across the country. Forward auction bidders will be up against a massive $86.4 billion price target, which was set by broadcasters at the close of the reverse auction in June.
Unlike the reverse auction, which was limited to 52 rounds of bidding, the FCC said the forward auction can continue indefinitely as long as demand outpaces supply.
The forward auction will start on Tuesday, August. 16 with one 6 hour bidding session from 10 a.m. to 4 p.m. Subsequent days will be divided into two two-hour rounds from 10 .am. to noon and 2 p.m. to 4 p.m., according to the FCC’s auction dashboard.
In order to enter the final stage to conclude the auction, two criteria must be met. First, with a clearing target of more than 70 MHz, the total proceeds of the forward auction must exceed the product of $1.25 per MHZ/pop x 70 MHz x the total number of pops for the high-demand Partial Economic Areas (PEAs) with at least one Category 1 block. Second, the proceeds of the forward auction be sufficient to meet mandatory expenses set forth in the Spectrum Act.
If these criteria are not met, additional auction stages will be conducted with progressively lower spectrum targets in the reverse auction and less spectrum available in the forward auction, the FCC said.
Based on the towering price target set by broadcasters, analysts have speculated the auction proceedings could take a while.
Roger Entner of Recon Analytics said it is “inevitable” that the FCC will have to go back and lower the clearing target as well as the amount that will be raised.
“The wireless industry, even with private equity and cable, I don’t see has a chance of raising that much,” Entner said in June.
Filed Under: Telecommunications (Spectrum)
